It and Institutions in the Structuring of European Finance: Urban Impacts

This article reviews recent attempts to create integrated pan-European stock markets and draws on extensive qualitative research carried out on London-based financial services firms and institutions between 1996 and 2000. The article uses the example of stock market integration and the creation of electronic trading platforms to examine the question of why it is that despite advances in technology and telecommunications financial agglomerations in inner urban areas continue to dominate financial markets. It is suggested that a variety of explanations hold the key to this question but that in terms of European stock market integration the agency on the part of institutional players, in particular the larger exchanges, is setting the pace for change but that technology issues are the framework within which they work as well as often the battlefield upon which they compete. Despite the prevalence of technologies capable of producing geographically disaggregated markets, it is shown that in order to best work these markets there are still advantages to be had from locating finance firms'trading operations in the midst of financial agglomerations. It is concluded that as the future of market structures and operation are the result of embedded human and institutional agency, inter-urban rivalries will continue to be crucial to the shape and location of European financial markets and activities.